I don't get it. Most companies registered in the state I live in, for example, are not actually located here. They simply receive mail through their registered agent there. Why would this be news?
On the other hand, most of the companies registered in Delaware are not trying to dodge US federal regulations. Polymarket is prohibited from operating in the US market. Nevertheless they have a substantial customer base in the US, and the part left unsaid in the NPR story, is that they’re probably also headquartered in the US. Almost definitely a violation of either gambling or securities regulations.
Incorporating in Delaware was initially attractive because of usury laws that matter to a small number of business sectors.
The charitable take is that most corporations want to comply with a state's regulations because unintentional compliance violations are painful and expensive, and it is relatively easy to be confident that you are compliant as a Delaware corp.
When I last did it, there were two wins for a tech startup incorporating in delaware:
* it's easy and well-documented - the main thing you have to remember is to check the boxes that say this is an actual company, and not a holding company for a boat (where the real tax dodging is)
* it was reported to make acquisitions easier (as the company acquiring you would either also be a Delaware corp or it would be more straightforward even if they weren't.)
Yes it is highly preferable for mergers/acquisitions/financing because the law is well established and widely known in those industries.
If you run into some legal question somewhere down the line, investors and their lawyers will be much more comfortable with Delaware law than some other state who may not have clear language on the books and/or have never tested that particular situation in court before.
When I had a C-corp in the 90s for a magazine I was publishing, my dad’s cousin insisted that I should incorporate in Delaware or Nevada. The thing is that because I was operating in California, especially at the small scale that I operated, it did nothing for me at all really. I would still pay California taxes and be subject to California regulations. Mostly it would make a difference if I were sued.
(Obligatory disclaimer that these are ~30-year-old memories of some dumb 20-something’s understanding of the law at the time.)
I used to work for a large financial services company who bought 4 storey office block and fitted it out with very small but with own door individual offices that had internet and a connected desk phone so that companies could rent them and say they had more than a box office address in that European capital, I never found out what the rent was.
Polymarket is already working on a full return to the US market aided by sympathetic policy changes of the current administration.
Additionally, the claim "most of the companies registered in Delaware are not trying to dodge US federal regulations" strikes me as dubious. Every company seeks to lower its regulatory burden. If they're not finding loopholes, then often they're the ones writing the regulations and funding congressional campaigns. I'm not sure the claim Polymarket is unique re its relationship to the government in this respect is credible. They seem to be working quite intimately with the current administration on returning from their Biden era "ban".
There’s dodging and then there’s _dodging_. If you are operating in a legal gray area, that’s an unsavory business practice that is, as you say, widespread. Then there’s operating illegally in full view of everybody. I do not personally ascribe to the idea that a thing is OK just because one is not currently being prosecuted. Polymarket (and Kalshi) is bad for the country, their claims to the contrary are highly dubious, and it’s a case where not only are they actually in the wrong, they are quite specifically legally wrong.
>the claim "most of the companies registered in Delaware are not trying to dodge US federal regulations" strikes me as dubious
huh? you aren't making a coherent argument. registering in any US state you are still subject to the same federal regulations, Delaware is not different, it offers no shelter from federal regulations.
in fact, if it is not your primary state of operation, then it subjects you to federal regulations for interstate commerce where you might not otherwise be.
They acknowledge this in the article as well, surprisingly enough.
> Corporate law experts say while there is nothing illegal about housing a business inside a shell company, the practice is often a strategic move to protect a firm's wealth or shield it against lawsuits and action from government regulators.
What is the thought process of someone writing this? Does this article have any meaningful or critical thought behind it?
They’re avoiding editorializing. PBS news has the same dry “facts only” flavor. Legitimate reporting takes the high road; corpo-media too often take the low road.
Unfortunately human information consumers tend to gravitate toward sources of maximum opinion.
They're doing their part in keeping a spotlight on Polymarket. The content of the article is not irrelevant, but it is less important than the existence of the article.
If the only shell(s) for a business are in a completely different jurisdiction with no connection whatsoever to any of the humans involved in operating the organization... yes. It's an outrageous way to escape the force of the law that has been rubber stamped by corrupt politicians.
It is exceeding common for US companies to incorporate without a presence in Delaware for the exact opposite reason of dodging the law. It is done to make legal compliance easier and more streamlined.
For-profit companies jurisdiction shopping without any physical presence is so clearly sketchy that it's wild anyone could see it otherwise. I can't imagine a normal person not being shocked in disbelief when they first learn about the concept of tax havens.
this is a good explainer video that talks about why Polymarket maintains a Panama HQ instead of a US one and why it has two different sites (.us vs .com). https://www.youtube.com/watch?v=seNwZhK4UdA
If the facts themselves discredit Polymarket, NPR doesn't have to like or dislike them. Polymarket made itself newsworthy, it can't complain if someone looks at them closely.
is it not true? from my perspective they're just stating a fact that some people may not be aware of (registering a business in a location it doesn't physically exist in)
So what? A registered agent is literally the agent registered to accept process service. The registered agent is clearly not the corporate headquarters, a branch office, or anything other than a business whose purpose is to accept lawsuits, subpoenas, and other legal and official notices.
It's an interesting "problem". The cities we have now exist because businesses and people want to be located in the same geographical area to maximize, well, doing business.
Now the opposite is happening. Businesses have no incentive being located in the same physical area they do business in. In fact, they have opposite incentives. The closer they are to their customers and workers, the less they can do things with impunity.
to be fair, empty non-existing official office is nothing new. iirc, Delaware has a warehouse that's official residence of hundreds of corporations (for tax reasons)
I don't understand the rest of the article, tho... It complains that company that (officially) left the US market and already blocks US ips from participating... isn't doing enough? Officially there's no ground to demand more
If you really want to solve the problem - start hunting down unofficial means. Investigate influencers that started mentioning Polymarket out of the blue. Look into news outlets that decided to start mentioning polymarket as supposed proxy of popular opinion. Start advertizing campaigns against gambling addiction the same way as against smoking
Breaking the law doesn’t follow the transitive property. Many businesses that people interact with have done illegal things. You typically can do business with someone as long as you aren’t breaking the law in doing so.
There's an easy way for polymarket to have a nice office in a nice city in USA: legalize it there and have nice enough regulations and incentives for it to move there.
It would help a lot actually for protecting people's money instead of driving it offshore.
But it doesn't look like making USA compete in this $15B market is NPR's goal with this article.
Does anyone have a good source that details these negative effects? I’m not doubting they exist, I mean gambling in general has many negative externalities, but I’m just interested in identifying the cancer aspects more specifically.
Theres evidence to suggest people in government are using it to front run actions on iran for profit for example. Is this useful to the public to have their lawmakers engage in side bets and dare I even say, game fixing as we see in sports but in the real world with bombs and deaths?
How hard are you looking? "I haven't seen arguments" doesn't mean much if you're not looking for them. You might as well have had a blindfold on. It's as meaningful as saying "I haven't seen arguments as to why Rust eliminates memory safety bugs."
While you're at it, let's legalize pig butchering scams too.
"It would help a lot actually for protecting people's money instead of driving it offshore.
But it doesn't look like making USA compete in this $75B market is NPR's goal with this article."
Which regulations in particular? All businesses rely on governments not choking them into nonexistence by having regulations that harm that business. Regulations are not an amorphus blob. There are other regulations that would also benefit a business to enable its existence, but we would not say (or should not say) that "the whole business relies on having regulations," because that is being intentionally vague about what the regulations in question actually are. The way you phrase it almost implied there is inherently something dangerous or suspect about something that is universal about how regulations can effect businesses.
Maybe that should be discouraged? Even if you don't think so, most companies aren't de facto attempts to skirt gambling regulations while also incentivizing corruption and fraud in everyday life.
Whois on npr.org just returns markmonitor.com... some how I don't think I'll find the author of this piece if I visit markmonitor's mailing address.
Any bets on if we'll find the author of this piece at NPR's agent address
1156 15TH STREET NW, Suite 605, Washington, DC, 20005, USA -- CSC REGISTERED AGENT SERVICES.
Perhaps I should fly there and post an article about not finding them, and post a couple pictures! Oh wait, I don't own a massive media outlet---- must be why I didn't know that its not interesting to fail to find companies at their registered agent addresses. What's NPR's excuse?
I don’t know why you were modded down because this is mostly true. They are still prohibited from operating in the US but it appears that regulators have no appetite to enforce the law.
"NPR finds 'no sign' of Polymarket's office; sources say the reporting team was 'deeply unsettled' to find a company operating without a mandatory 40-minute 'Land Acknowledgment' in the lobby."
The charitable take is that most corporations want to comply with a state's regulations because unintentional compliance violations are painful and expensive, and it is relatively easy to be confident that you are compliant as a Delaware corp.
* it's easy and well-documented - the main thing you have to remember is to check the boxes that say this is an actual company, and not a holding company for a boat (where the real tax dodging is)
* it was reported to make acquisitions easier (as the company acquiring you would either also be a Delaware corp or it would be more straightforward even if they weren't.)
If you run into some legal question somewhere down the line, investors and their lawyers will be much more comfortable with Delaware law than some other state who may not have clear language on the books and/or have never tested that particular situation in court before.
(Obligatory disclaimer that these are ~30-year-old memories of some dumb 20-something’s understanding of the law at the time.)
Additionally, the claim "most of the companies registered in Delaware are not trying to dodge US federal regulations" strikes me as dubious. Every company seeks to lower its regulatory burden. If they're not finding loopholes, then often they're the ones writing the regulations and funding congressional campaigns. I'm not sure the claim Polymarket is unique re its relationship to the government in this respect is credible. They seem to be working quite intimately with the current administration on returning from their Biden era "ban".
huh? you aren't making a coherent argument. registering in any US state you are still subject to the same federal regulations, Delaware is not different, it offers no shelter from federal regulations.
in fact, if it is not your primary state of operation, then it subjects you to federal regulations for interstate commerce where you might not otherwise be.
> Corporate law experts say while there is nothing illegal about housing a business inside a shell company, the practice is often a strategic move to protect a firm's wealth or shield it against lawsuits and action from government regulators.
What is the thought process of someone writing this? Does this article have any meaningful or critical thought behind it?
Many people do not, which is why it is noteworthy, even if it is standard.
Maybe let's make it not normal?
Mostly because international litigation is, let's say, fraught issues (as in "good luck!")
https://www.siliconrepublic.com/business/apple-to-open-dubli...
Now the opposite is happening. Businesses have no incentive being located in the same physical area they do business in. In fact, they have opposite incentives. The closer they are to their customers and workers, the less they can do things with impunity.
I don't understand the rest of the article, tho... It complains that company that (officially) left the US market and already blocks US ips from participating... isn't doing enough? Officially there's no ground to demand more
If you really want to solve the problem - start hunting down unofficial means. Investigate influencers that started mentioning Polymarket out of the blue. Look into news outlets that decided to start mentioning polymarket as supposed proxy of popular opinion. Start advertizing campaigns against gambling addiction the same way as against smoking
It doesn't make it acceptable, just endemic
It would help a lot actually for protecting people's money instead of driving it offshore.
But it doesn't look like making USA compete in this $15B market is NPR's goal with this article.
Polymarket appears to have people who have both the ability to shape outcomes and anonymously profit on those outcomes.
Here's an example: https://www.ncbi.nlm.nih.gov/books/NBK230628/
This is another excellent article that discusses some of the problems, and has links to other such articles: https://www.wsj.com/finance/investing/polymarket-kalshi-bett...
"It would help a lot actually for protecting people's money instead of driving it offshore. But it doesn't look like making USA compete in this $75B market is NPR's goal with this article."
If the shoe fits..
https://en.wikipedia.org/wiki/Panama_Papers#Illegal_activiti...
https://www.theguardian.com/news/2016/apr/03/the-panama-pape...
(Wow. It's only been 10 years since the leak occurred? How time flies.)
Any bets on if we'll find the author of this piece at NPR's agent address 1156 15TH STREET NW, Suite 605, Washington, DC, 20005, USA -- CSC REGISTERED AGENT SERVICES.
Perhaps I should fly there and post an article about not finding them, and post a couple pictures! Oh wait, I don't own a massive media outlet---- must be why I didn't know that its not interesting to fail to find companies at their registered agent addresses. What's NPR's excuse?
The only purpose I could see for this intro is to prime the reader negatively before any argument.